This is based on the “dicing” rate in nanite. There’s a cvar to adjust it, but fewer triangles won’t necessarily improve performance and can actually make it worse.
The number of triangles is intentional to have roughly one triangle per pixel regardless of distance. Since nanite isn’t really limited in performance by triangles, adjusting this doesn’t help much despite the quality loss. It might seem like “too” many, but it is intentional. Also, unlike regular nanite, it lacks the pre-processing steps that allow for smarter clustering which could provide more aggressive detail culling so it must use a more naïve fixed tessellation rate. This is why a regular nanite mesh might show many times fewer triangles at a particular distance.